As the eCommerce market becomes more mainstream, more and more people are flocking to the industry to launch their businesses.
This includes foreigners looking to take advantage of ecommerce opportunities but needs to navigate the complexities of GST registration.
If you are a foreign company planning to do business in India, it is important to be aware of the GST registration process and the benefits of registration.
Here we'll give you a comprehensive guide to GST registration for foreign company in India, including the eligibility criteria, rates, compliance requirements, and benefits of complying. By the end of this blog, you'll have a clear understanding of how GST affects your business in India.,
What is GST?
GST is a tax levied on the supply of goods and services in India. It is a destination-based tax, which means that it is levied on the consumption of goods and services in the country.
GST is levied on the value added at each stage of the supply chain, from the manufacturer to the retailer. The final consumer pays the tax, but the businesses collect it at each stage of the supply chain.
GST was introduced in India on 1 July 2017 and replaced a number of existing taxes, including VAT, service tax, excise duty, and entry tax.
GST is administered by a centralised authority called the GST Council. The GST Council comprises representatives from all Indian states and union territories.
What is the GST registration process for foreign company in India?
The process of GST registration for foreign company in India can be broadly divided into two parts:
- Obtaining a GST Identification Number (GSTIN)
- Applying for GST registration
- Obtaining a GST Identification Number (GSTIN)
The first step in the foreign company's GST registration process is obtaining a GST Identification Number (GSTIN). This can be done by applying to the Central Board of Excise and Customs (CBEC).
Applying for GST Registration
Once you have obtained a GSTIN, you can then apply for GST registration. This can be done online through the GST Portal or offline through a paper application form.
What are the benefits of GST registration for foreign company in India?
The benefits of GST registration for foreign company in India are as follows:
1. It makes doing business in India easier: Foreign company often find it difficult to comply with the multiple indirect tax laws that existed in India before GST. There is only one indirect tax law, so it is much easier for foreign companies to do business in India.
2. It reduces the cost of doing business in India: The introduction of GST has reduced the overall tax burden for foreign companies doing business in India. This has made India a more attractive destination for foreign investment.
How can foreign company register for GST in India?
Foreign companies can register for GST in India either online through the GST Portal or offline through a paper application form.
To register online, the foreign company must first obtain a user ID and password from the CBEC.
Once they have done so, they can log in to the GST Portal and begin the registration process.
The registration process will require the foreign company to provide various pieces of information, such as its name, address, email address, and contact details.
A foreign company must download and fill out a paper application form to register offline.
The form must then be submitted to the CBEC along with supporting documentation.
The required supporting documentation will vary depending on the type of business the foreign company is engaged in.
Documents required for NRI GST registration for foreign company in India
When applying for GST registration, the documents required for NRI GST registration for foreign company in India are:
- A copy of the company's Certificate of Incorporation or other proof of business existence
- A copy of the company's Memorandum and Articles of Association
- A list of the company's directors
- The company's bank statement for the past 6 months
- The company's latest audited financial statements
- Proof of residence for the company's directors
- A copy of the passport or other valid ID for the Authorized Signatory
- A Declaration by the Authorized Signatory
- An undertaking by a Chartered Accountant, Cost Accountant, or Company Secretary that is registered with the GST Portal
- An undertaking by a person who is registered with the GST Portal
What is the procedure for GST registration for foreign company in India?
The procedure for GST registration for foreign company in India is as follows:
First, the foreign company must obtain a GST Identification Number (GSTIN) from the Central Board of Excise and Customs (CBEC).
Second, a foreign company can register for GST in India either online through the GST Portal or offline through a paper application form.
To register online, the foreign company must first obtain a user ID and password from the CBEC. Once they have done so, they can log in to the GST Portal and begin the registration process.
A foreign company must download and fill out a paper application form to register offline.
The form must then be submitted to the CBEC along with supporting documentation.
The required supporting documentation will vary depending on the type of business the foreign company is engaged in.
What are the eligibility criteria for GST registration for foreign company in India?
There are a few key eligibility criteria that foreign company must meet in order to register for GST in India.
Firstly, the company must have a valid business presence in India – this could be in the form of an office, branch, factory, or any other physical establishment.
Secondly, the company must have a valid Indian bank account.
Lastly, the company must appoint a GST agent who is authorised to act on its behalf for GST purposes.
If a foreign company meets these criteria, then it can apply for GST registration by filing the appropriate application form with the relevant authorities.
The company will need to provide various supporting documents along with the application form, such as proof of business presence in India, bank statements, and details of the appointed GST agent.
Once the registration is approved, the company will be issued a GST registration number which must be quoted on all invoices issued by the company.
What are the rates of GST for foreign company in India?
The rate of GST for foreign company in India depends on the type of goods or services they are supplying.
For example, the standard rate of GST for most goods and services is 18%. However, there are some exceptions to this, such as for essential items like food and medicines, which attract a lower rate of 5%. There are also certain types of services that are exempt from GST altogether.
If you are a foreign company supplying goods or services in India, it is important to be aware of the applicable GST rates so that you can correctly price your products and services.
You can find more information on the rates of GST for foreign company in India on the website of the Central Board of Excise and Customs (CBEC).
What are the compliance requirements for GST registration for foreign company in India?
After a foreign company registers for GST in India, it must file monthly GST returns.
These returns must include details of all supplies made by the company during the month and any GST paid on purchases made from other suppliers.
The return must also show the company's total monthly tax liability and any payments made towards this liability.
Foreign company must also submit an annual return, which summarises the supplies made and purchases made during the financial year.
GST registration for foreign companies in India is a relatively simple process, but it is important that the company comply with all relevant rules and regulations.
By ensuring that they are up to date with their compliance requirements, a foreign company can avoid penalties and ensure that they are correctly charging GST on their products and services.
What are the benefits of complying with GST registration for foreign company in India?
One of the main benefits of complying with GST registration for foreign company in India is that it helps to ensure that the company is correctly pricing its products and services.
By being aware of the applicable GST rates, a foreign company can avoid overcharging or undercharging customers for their goods and services.
Additionally, GST registration helps ensure that foreign companies correctly file their monthly and annual GST returns. This helps to reduce the risk of penalties or interest charges being applied by the Indian tax authorities.
Another benefit of complying with GST registration for foreign company in India is that it can help to build trust with customers and suppliers.
Customers are more likely to do business with a company registered with the relevant authorities and compliant with all applicable regulations.
Similarly, suppliers are more likely to be willing to work with a company that is registered for GST in India. This can help to create long-term relationships between a foreign company and its customers and suppliers in India.
Finally, complying with GST registration for foreign company in India can help to create a good reputation for the company.
By demonstrating compliance with Indian laws and regulations, foreign company can show that they are serious about doing business in India.
This can help attract new customers and partners and make it easier to secure funding from investors.
Why choose Especia
Especia is a reliable and trusted name when it comes to business services. They have a team of experts who are knowledgeable and experienced in a wide range of business requirements.
They are committed to providing the best possible service to their clients, and they always go the extra mile to make sure that they are satisfied with their work.
They offer a wide range of services and are confident they can meet all your business needs. Contact them today to find out more about what they can do for you!
